PART I FINANCIAL INFORMATION This section presents Cerus Corporation's unaudited condensed consolidated financial statements and detailed notes on accounting policies, financial instruments, and key agreements [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section details Cerus Corporation's unaudited condensed consolidated financial statements and comprehensive notes on accounting policies and financial instruments [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20%E2%80%93%20June%2030%2C%202025%20and%20December%2031%2C%202024) Total assets and liabilities increased from December 2024 to June 2025, driven by higher inventories and current debt, while equity slightly decreased Metric (in thousands) | Metric (in thousands) | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :---------------- | | **Assets** | | | | Total current assets | $168,534 | $152,022 | | Total assets | $213,071 | $200,917 | | **Liabilities** | | | | Total current liabilities | $84,358 | $63,608 | | Total liabilities | $156,901 | $144,021 | | **Equity** | | | | Total stockholders' equity | $55,428 | $56,145 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20%E2%80%93%20Three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024) Product and government contract revenue increased for both periods ended June 30, 2025, leading to a narrowed net loss despite continued losses Metric (in thousands, except per share) | Metric (in thousands, except per share) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Product revenue | $52,445 | $45,079 | $95,684 | $83,444 | | Government contract revenue | $7,684 | $5,440 | $13,298 | $10,470 | | Gross profit on product revenue | $28,975 | $24,666 | $54,399 | $45,938 | | Research and development | $18,900 | $14,969 | $35,505 | $29,451 | | Selling, general and administrative | $21,182 | $18,973 | $41,468 | $38,772 | | Loss from operations | $(3,423) | $(3,836) | $(9,276) | $(11,815) | | Net loss attributable to Cerus Corporation | $(5,707) | $(5,775) | $(13,424) | $(15,463) | | Basic and diluted net loss per share | $(0.03) | $(0.03) | $(0.07) | $(0.08) | [Condensed Consolidated Statements of Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Loss%20%E2%80%93%20Three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024) Comprehensive loss decreased for both periods ended June 30, 2025, due to a reduced net loss and changes in investment gains/losses Metric (in thousands) | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Net loss | $(5,715) | $(5,775) | $(13,433) | $(15,465) | | Foreign currency translation gain (loss) adjustment | $5 | $(3) | $8 | $(11) | | Unrealized (losses) gains on available-for-sale investments, net of taxes | $(12) | $258 | $119 | $418 | | Total comprehensive loss attributable to Cerus Corporation | $(5,714) | $(5,520) | $(13,297) | $(15,056) | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity%20%E2%80%93%20Three%20and%20six%20months%20ended%20June%2030%2C%202025%20and%202024) Stockholders' equity remained stable, with increased paid-in capital from stock compensation offset by accumulated deficit from net losses Metric (in thousands) | Metric (in thousands) | December 31, 2024 | March 31, 2025 | June 30, 2025 | | :-------------------- | :---------------- | :------------- | :------------ | | Common Stock (Amount) | $186 | $191 | $191 | | Additional Paid-in Capital | $1,121,887 | $1,128,814 | $1,134,462 | | Accumulated Deficit | $(1,065,528) | $(1,073,242) | $(1,078,952) | | Total Stockholders' Equity | $56,896 | $56,242 | $56,170 | - Issuance of common stock from vesting of restricted stock units and ESPP purchases contributed to an increase in common stock and additional paid-in capital[16](index=16&type=chunk) - Stock-based compensation added **$6,635 thousand** for the three months ended March 31, 2025, and **$5,681 thousand** for the three months ended June 30, 2025, to additional paid-in capital[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20%E2%80%93%20Six%20months%20ended%20June%2030%2C%202025%20and%202024) Operating cash flow shifted to negative in 2025 due to inventory, while investing and financing activities provided less cash than in 2024 Metric (in thousands) | Metric (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------- | :----------------------------- | :----------------------------- | | Net cash (used in) provided by operating activities | $(3,290) | $2,360 | | Net cash used in investing activities | $(2,278) | $(5,661) | | Net cash provided by financing activities | $942 | $4,158 | | Net (decrease) increase in cash, cash equivalents, and restricted cash | $(4,230) | $751 | | Cash, cash equivalents, and restricted cash, end of period | $17,131 | $14,110 | - The shift in operating cash flow from positive to negative was primarily driven by increased inventory-related purchases and the timing of cash collections and payments in 2025[171](index=171&type=chunk) - The decrease in net cash from financing activities was mainly due to proceeds from the Term Loan Credit Agreement during the six months ended June 30, 2024, which did not recur in 2025[173](index=173&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail accounting policies, financial instruments, liabilities, debt, leases, equity, income taxes, and development agreements, including BARDA funding updates [Note 1. Summary of Significant Accounting Policies](index=9&type=section&id=Note%201.%20Summary%20of%20Significant%20Accounting%20Policies) This note details Cerus Corporation's accounting policies, covering revenue recognition, R&D, investments, inventories, stock-based compensation, and foreign currency - Revenue is recognized based on a five-step model, with product revenue from sales of INTERCEPT Blood System components and services, and government contract revenue recognized as costs are incurred or milestones are met[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk) Product Revenue by Geographical Location (in thousands) | Region | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | North America | $35,286 | $30,097 | $65,886 | $55,195 | | Europe, Middle East and Africa | $16,612 | $13,725 | $28,824 | $26,439 | | Other | $547 | $1,257 | $974 | $1,810 | | Total product revenue | $52,445 | $45,079 | $95,684 | $83,444 | - The company consolidates its joint venture in China (Cerus Zhongbaokang (Shandong) Biomedical Co., LTD.) as a variable interest entity where it is the primary beneficiary[52](index=52&type=chunk) [Note 2. Available-for-sale Securities and Fair Value on Financial Instruments](index=19&type=section&id=Note%202.%20Available-for-sale%20Securities%20and%20Fair%20Value%20on%20Financial%20Instruments) Available-for-sale securities, primarily U.S. government and corporate debt, totaled $63.3 million, with no credit losses recognized Available-for-sale Securities (in thousands) | Category | June 30, 2025 Fair Value | December 31, 2024 Fair Value | | :-------------------------- | :----------------------- | :--------------------------- | | Money market funds | $1,269 | $1,773 | | United States government agency securities | $23,810 | $24,062 | | Corporate debt securities | $35,549 | $33,371 | | Mortgage-backed securities | $2,675 | $2,753 | | Total available-for-sale securities | $63,303 | $61,959 | Available-for-sale Securities by Contractual Maturity (in thousands) | Maturity | June 30, 2025 Fair Value | December 31, 2024 Fair Value | | :-------------------------- | :----------------------- | :--------------------------- | | One year or less | $45,734 | $38,173 | | Greater than one year and less than five years | $17,569 | $23,786 | | Total available-for-sale securities | $63,303 | $61,959 | - The company did not recognize any expected credit losses on its available-for-sale securities during the three and six months ended June 30, 2025 and 2024[67](index=67&type=chunk) [Note 3. Inventories](index=21&type=section&id=Note%203.%20Inventories) Total inventories increased to $68.9 million by June 2025, primarily due to a rise in finished goods Inventories (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :---------------- | :------------ | :---------------- | | Raw materials | $10,208 | $8,641 | | Work-in-process | $22,803 | $22,522 | | Finished goods | $35,867 | $21,132 | | Total inventories | $68,878 | $52,295 | | Less: non-current inventories | $14,349 | $14,145 | | Total current inventories | $54,529 | $38,150 | [Note 4. Accrued Liabilities](index=21&type=section&id=Note%204.%20Accrued%20Liabilities) Accrued liabilities rose to $20.9 million by June 2025, mainly from increased compensation and professional services Accrued Liabilities (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Accrued compensation and related costs | $12,628 | $11,939 | | Accrued professional services | $4,528 | $3,406 | | Other accrued expenses | $3,744 | $3,598 | | Total accrued liabilities | $20,900 | $18,943 | [Note 5. Debt](index=22&type=section&id=Note%205.%20Debt) Total debt increased to $84.9 million by June 2025, with a significant portion reclassified as current, under secured loan agreements Debt (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :---------------- | :------------ | :---------------- | | Term Loan | $64,891 | $64,862 | | Revolving Loan | $20,000 | $19,297 | | Total debt | $84,891 | $84,159 | | Less: current portion | $28,125 | $19,297 | | Non-current portion | $56,766 | $64,862 | Expected Principal, Interest and Fee Payments on Term Loan (in thousands) | Year ended December 31, | Principal | Interest and Fees | Total | | :---------------------- | :-------- | :---------------- | :---- | | 2025 | $0 | $3,725 | $3,725 | | 2026 | $24,375 | $6,499 | $30,874 | | 2027 | $32,500 | $2,939 | $35,439 | | 2028 | $8,125 | $1,456 | $9,581 | | Total | $65,000 | $14,619 | $79,619 | - The Term Loan Credit Agreement bears interest at a floating rate of Term SOFR (subject to a **1.00% floor**) plus **6.50%**, approximately **11.2%** at June 30, 2025[78](index=78&type=chunk) [Note 6. Leases](index=24&type=section&id=Note%206.%20Leases) Operating leases for facilities and equipment have a 4.1-year average term, with $1.972 million in expense for H1 2025 Operating Lease Information | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Weighted-average remaining lease term | 4.1 years | 4.8 years | | Weighted-average discount rate | 8.9% | 8.6% | Operating Lease Expense (in thousands) | Period | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Operating lease expense | $1,007 | $1,000 | $1,972 | $1,964 | [Note 7. Commitments and Contingencies](index=26&type=section&id=Note%207.%20Commitments%20and%20Contingencies) Cerus had $26.0 million in short-term and $3.3 million in long-term purchase commitments for INTERCEPT Blood System components - Short-term purchase commitments totaled **$26.0 million** as of June 30, 2025[92](index=92&type=chunk) - Long-term purchase commitments totaled **$3.3 million** as of June 30, 2025[92](index=92&type=chunk) [Note 8. Stockholders' Equity](index=26&type=section&id=Note%208.%20Stockholders%27%20Equity) An Amended Sales Agreement allows for $96.8 million in common stock sales, with no activity in H1 2025 - The Amended Sales Agreement allows for the issuance and sale of up to **$96.8 million** of common stock[94](index=94&type=chunk) - No shares were sold under the Amended Sales Agreement during the six months ended June 30, 2025[95](index=95&type=chunk) - Approximately **$96.8 million** of common stock was available for sale under the Amended Sales Agreement as of June 30, 2025[95](index=95&type=chunk) [Note 9. Stock-Based Compensation](index=27&type=section&id=Note%209.%20Stock-Based%20Compensation) Cerus maintains ESPP and equity incentive plans, with 2.1 million shares available for ESPP and 14.6 million for the 2024 Plan Stock Options Activity (in thousands, except per share amounts) | Metric | Number of Options Outstanding | | :-------------------------- | :---------------------------- | | Balance at December 31, 2024 | 12,297 | | Forfeited/canceled | (1,713) | | Balance at June 30, 2025 | 10,584 | RSUs Activity (in thousands, except per share amounts) | Metric | Number of RSUs Unvested | | :-------------------------- | :---------------------- | | Balance at December 31, 2024 | 13,661 | | Granted | 10,830 | | Vested | (5,589) | | Forfeited | (738) | | Balance at June 30, 2025 | 18,164 | - As of June 30, 2025, approximately **14.6 million shares** were available for future issuance under the 2024 Plan[100](index=100&type=chunk) [Note 10. Income Taxes](index=29&type=section&id=Note%2010.%20Income%20Taxes) Income tax expense was $76 thousand (Q2) and $150 thousand (H1) from the European subsidiary, with a U.S. deferred tax valuation allowance Income Tax Expense (Benefit) (in thousands) | Period | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Provision for (benefit from) income taxes | $76 | $(56) | $150 | $18 | - Income tax expenses were primarily related to the operating activities of the Cerus Europe B.V. subsidiary[103](index=103&type=chunk)[167](index=167&type=chunk) - A valuation allowance is maintained on substantially all U.S. net deferred tax assets due to a history of cumulative operating losses[168](index=168&type=chunk) [Note 11. Development and License Agreements](index=29&type=section&id=Note%2011.%20Development%20and%20License%20Agreements) Cerus has a supply agreement with Fresenius and government contracts (BARDA, FDA, DoD) funding R&D for pathogen reduction technologies - The 2022 Agreement with Fresenius for manufacturing disposable kits for platelet and plasma systems extends until **December 31, 2031**[104](index=104&type=chunk) - BARDA committed funding under the 2016 BARDA Agreement increased to **$185.5 million** as of June 30, 2025, with a total funding opportunity of **$270.2 million** through September 2026 if subsequent Option Periods are exercised[107](index=107&type=chunk) - The 2024 BARDA Agreement includes committed funding of up to **$32.1 million** for the base period, with a total funding opportunity of **$188.4 million** if subsequent option periods are exercised, supporting the red blood cell system's development[108](index=108&type=chunk) - The DoD agreement for pathogen-reduced, lyophilized cryoprecipitate was extended to **February 2027**, increasing the total contract value from **$9.1 million** to **$17.8 million**[110](index=110&type=chunk) [Note 12. Segment, Customer and Geographic Information](index=33&type=section&id=Note%2012.%20Segment%2C%20Customer%20and%20Geographic%20Information) Cerus operates as one segment, with U.S. and European operations, and key customers including American Red Cross and Établissement Français du Sang - The company operates in one reportable segment, with the CEO as the Chief Operating Decision Maker[113](index=113&type=chunk) Significant Customers (% of Total Product Revenue) | Customer | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :---------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | American Red Cross | 33% | 36% | 36% | 36% | | OneBlood | 11% | * | * | * | | Établissement Français du Sang | 10% | 11% | 10% | 13% | - The One Big Beautiful Bill Act (OBBBA) was enacted on **July 4, 2025**[117](index=117&type=chunk) [Note 13. Subsequent Events](index=33&type=section&id=Note%2013.%20Subsequent%20Events) The One Big Beautiful Bill Act (OBBBA) was enacted in July 2025, amending U.S. tax law, with its financial impact under evaluation - The One Big Beautiful Bill Act (OBBBA) was enacted on **July 4, 2025**[117](index=117&type=chunk) - OBBBA amends U.S. tax law, including provisions related to bonus depreciation, research and development expenses, and foreign derived intangible income[117](index=117&type=chunk) - The company is currently evaluating the impact of OBBBA on its condensed consolidated financial statements[117](index=117&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Cerus Corporation's financial performance, liquidity, and capital resources, highlighting revenue growth, operating expenses, and INTERCEPT Blood System development [Overview](index=36&type=section&id=Overview) Cerus commercializes INTERCEPT Blood System for platelets/plasma, develops the red blood cell system, and relies on government funding and capital for growth - The INTERCEPT Blood System for platelets and plasma is marketed and sold globally, including the U.S. and Europe, with FDA approval and CE Certificates of Conformity[121](index=121&type=chunk)[122](index=122&type=chunk) - The red blood cell system is currently in development and has not been commercialized; its MDR application in Europe was closed due to insufficient data on impurity profiles, requiring resubmission and ongoing product development costs[123](index=123&type=chunk)[125](index=125&type=chunk) - For U.S. FDA approval of the red blood cell system, additional clinical trial data (beyond ReCePI and RedeS studies) is anticipated, with RedeS enrollment expected by end of **2025** and completion in **H2 2026**[125](index=125&type=chunk) - The company relies on BARDA agreements for significant funding for the red blood cell system's development, but faces risks of funding reductions or delays, potentially requiring self-funding or additional capital[126](index=126&type=chunk) - Commercialization of INTERCEPT Fibrinogen Complex (IFC) in the U.S. is dependent on blood center partners obtaining site-specific BLAs from the FDA, with delays impacting nationwide availability[127](index=127&type=chunk)[128](index=128&type=chunk) [Fresenius](index=42&type=section&id=Fresenius) Fresenius manufactures INTERCEPT platelet and plasma systems; production delays could hinder Cerus's growth and increase costs - Fresenius is the sole manufacturer and supplier of disposable kits for the INTERCEPT platelet and plasma systems under an agreement until **December 31, 2031**[138](index=138&type=chunk) - Delays in Fresenius qualifying and licensing new production facilities may adversely impact Cerus's ability to grow its platelet and plasma business[139](index=139&type=chunk) [Government contracts](index=42&type=section&id=Government%20contracts) Cerus holds BARDA, FDA, and DoD contracts funding pathogen reduction R&D, subject to audits, termination, and cost restrictions - The 2016 BARDA Agreement provides up to **$185.5 million** in committed funding for red blood cell system development, but BARDA will no longer exercise unexercised options[142](index=142&type=chunk)[143](index=143&type=chunk) - The 2024 BARDA Agreement offers up to **$32.1 million** in committed funding for its base period, with a total funding opportunity of **$188.4 million** if subsequent options are exercised, supporting FDA PMA application and improved red blood cell system development[144](index=144&type=chunk) - A five-year agreement with the FDA for next-generation pathogen reduction compounds has a total contract value of **$11.1 million**[145](index=145&type=chunk) - The DoD agreement for pathogen-reduced, lyophilized cryoprecipitate was amended to extend to **February 2027** and increased to a total contract value of **$17.8 million**[146](index=146&type=chunk) [Equity Agreements](index=44&type=section&id=Equity%20Agreements) Equity agreement details are provided in Note 8, Stockholders' Equity - Information on equity agreements is detailed in Note 8, Stockholders' Equity[147](index=147&type=chunk) [Debt Agreements](index=44&type=section&id=Debt%20Agreements) Debt agreement details are provided in Note 5, Debt - Information on debt agreements is detailed in Note 5, Debt[148](index=148&type=chunk) [Critical Accounting Policies and Management Estimates](index=44&type=section&id=Critical%20Accounting%20Policies%20and%20Management%20Estimates) Critical accounting policies and estimates remain consistent with the 2024 Annual Report on Form 10-K - Critical accounting policies and significant estimates have not substantially changed from the 2024 Annual Report on Form 10-K[149](index=149&type=chunk) [Results of Operations](index=45&type=section&id=Results%20of%20Operations) Cerus saw revenue growth and narrowed net loss in H1 2025, despite increased R&D and SG&A, with non-operating expenses impacted by foreign exchange [Revenue](index=45&type=section&id=Revenue) Total revenue grew 19% to $60.1 million (Q2) and 16% to $109.0 million (H1) in 2025, driven by product and BARDA contract revenue Revenue (in thousands, except percentages) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------------ | :--------------------------- | :--------------------------- | :--------- | :--------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Product revenue | $52,445 | $45,079 | $7,366 | 16% | $95,684 | $83,444 | $12,240 | 15% | | Government contract revenue | $7,684 | $5,440 | $2,244 | 41% | $13,298 | $10,470 | $2,828 | 27% | | Total revenue | $60,129 | $50,519 | $9,610 | 19% | $108,982 | $93,914 | $15,068 | 16% | - Product revenue growth was primarily due to increased sales volume of disposable platelet kits in Europe for the three-month period and to U.S. customers for the six-month period[150](index=150&type=chunk) - Government contract revenue increased due to higher revenue from BARDA, particularly from the 2024 BARDA Agreement executed in **Q4 2024**[151](index=151&type=chunk) [Cost of Product Revenue](index=45&type=section&id=Cost%20of%20Product%20Revenue) Cost of product revenue increased, with gross margin at 55% (Q2) and 57% (H1), influenced by product mix and favorable variances Cost of Product Revenue (in thousands, except percentages) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Cost of product revenue | $23,470 | $20,413 | $3,057 | 15% | $41,285 | $37,506 | $3,779 | 10% | - Gross margin on product sales was **55%** for the three months ended June 30, 2025 and 2024, and **57%** for the six months ended June 30, 2025, up from **55%** in the prior year[154](index=154&type=chunk) - The increase in six-month gross margin was primarily due to capitalization of inventoriable charges and nonrecurring release of previously accounted for favorable variances[154](index=154&type=chunk) [Research and Development Expenses](index=46&type=section&id=Research%20and%20Development%20Expenses) R&D expenses rose 26% (Q2) and 21% (H1) to $18.9 million and $35.5 million, driven by new illuminator, compensation, and BARDA activities Research and Development Expenses (in thousands, except percentages) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------------ | :--------------------------- | :--------------------------- | :--------- | :--------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Research and development | $18,900 | $14,969 | $3,931 | 26% | $35,505 | $29,451 | $6,054 | 21% | - The increase was primarily driven by costs related to the new LED-based illuminator, increased compensation, and work performed related to BARDA agreements[157](index=157&type=chunk) - Additional R&D costs are expected due to inflationary pressures, regulatory approvals for new products/geographies, and ongoing clinical development of the red blood cell system[158](index=158&type=chunk) [Selling, General and Administrative Expenses](index=46&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses) SG&A expenses increased 12% (Q2) and 7% (H1) to $21.2 million and $41.5 million, mainly due to higher compensation costs Selling, General and Administrative Expenses (in thousands, except percentages) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Selling, general and administrative | $21,182 | $18,973 | $2,209 | 12% | $41,468 | $38,772 | $2,696 | 7% | - The increase was primarily driven by increased compensation costs[160](index=160&type=chunk) - Additional SG&A costs are expected due to inflationary pressures on labor and vendor costs, and escalating trade tensions and tariffs[159](index=159&type=chunk) [Non-Operating Expense, Net](index=46&type=section&id=Non-Operating%20Expense%2C%20Net) Non-operating expense, net, increased 11% (Q2) and 10% (H1) to $2.2 million and $4.0 million, driven by foreign exchange losses Non-Operating Expense, Net (in thousands, except percentages) | Category | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :---------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Foreign exchange (loss) gain | $(911) | $(77) | $(834) | 1,083% | $(1,198) | $68 | $(1,266) | (1,862%) | | Interest expense | $(2,150) | $(2,330) | $180 | (8%) | $(4,260) | $(4,564) | $304 | (7%) | | Other income, net | $845 | $412 | $433 | 105% | $1,451 | $864 | $587 | 68% | | Total non-operating expense, net | $(2,216) | $(1,995) | $(221) | 11% | $(4,007) | $(3,632) | $(375) | 10% | [Foreign Exchange (Loss) Gain](index=47&type=section&id=Foreign%20Exchange%20%28Loss%29%20Gain) Foreign exchange losses occurred in Q2 and H1 2025, primarily due to Euro-U.S. dollar exchange rate fluctuations - Foreign exchange loss for the three months ended June 30, 2025, was **$(911) thousand**, compared to **$(77) thousand** in 2024[163](index=163&type=chunk) - Foreign exchange loss for the six months ended June 30, 2025, was **$(1,198) thousand**, compared to a gain of **$68 thousand** in 2024[163](index=163&type=chunk) - These fluctuations are primarily due to foreign exchange variations between the Euro and the U.S. dollar[164](index=164&type=chunk) [Interest Expense](index=47&type=section&id=Interest%20Expense) Interest expense decreased by 8% (Q2) and 7% (H1) due to lower interest rates on the Term Loan - Interest expense decreased by **$180 thousand (8%)** for the three months ended June 30, 2025, and by **$304 thousand (7%)** for the six months ended June 30, 2025[163](index=163&type=chunk) - The decrease was primarily due to a decrease in interest rates on the Term Loan[165](index=165&type=chunk) [Other Income, net](index=47&type=section&id=Other%20Income%2C%20net) Other income, net, increased 105% (Q2) to $845 thousand and 68% (H1) to $1.451 million in 2025 - Other income, net, increased by **$433 thousand (105%)** for the three months ended June 30, 2025[163](index=163&type=chunk) - Other income, net, increased by **$587 thousand (68%)** for the six months ended June 30, 2025[163](index=163&type=chunk) [Provision for Income Taxes](index=47&type=section&id=Provision%20for%20Income%20Taxes) Income tax expense was $76 thousand (Q2) and $150 thousand (H1) from the European subsidiary, with a U.S. deferred tax valuation allowance Provision for (benefit from) Income Taxes (in thousands, except percentages) | Period | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Provision for (benefit from) income taxes | $76 | $(56) | $132 | (236%) | $150 | $18 | $132 | 733% | - Tax expenses were primarily a result of the Cerus Europe B.V. subsidiary's activities[167](index=167&type=chunk) - Substantially all U.S. deferred tax assets are subject to a valuation allowance due to cumulative operating losses[168](index=168&type=chunk) [Liquidity and Capital Resources](index=47&type=section&id=Liquidity%20and%20Capital%20Resources) Cerus's liquidity, totaling $79.2 million, relies on diverse capital sources, with operating cash flow shifting to negative due to inventory Cash, Cash Equivalents, Short-term Investments, and Restricted Cash (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :------------------------ | :------------ | :---------------- | | Cash and cash equivalents | $15,991 | $20,266 | | Short-term investments | $62,034 | $60,186 | | Restricted cash | $1,140 | $1,095 | | Total | $79,165 | $81,547 | Indebtedness (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :---------------- | :------------ | :---------------- | | Debt – current | $28,125 | $19,297 | | Debt – non-current | $56,766 | $64,862 | | Total | $84,891 | $84,159 | - Net cash used in operating activities was **$(3,290) thousand** for the six months ended June 30, 2025, compared to net cash provided of **$2,360 thousand** in the same period of 2024, primarily due to increased inventory purchases[171](index=171&type=chunk) - Working capital decreased to **$84,584 thousand** at June 30, 2025, from **$88,890 thousand** at December 31, 2024, mainly due to increased accounts payable and accrued liabilities, and reclassification of long-term debt to short-term[174](index=174&type=chunk) - The company believes its available cash, cash equivalents, short-term investments, and cash from product sales and government contracts will be sufficient for at least the next **12 months**[176](index=176&type=chunk) [Commitments](index=52&type=section&id=Commitments) Financial commitments are detailed in Notes 5, 6, and 7; no off-balance sheet arrangements existed - Detailed information on commitments can be found in Note 5 (Debt), Note 6 (Leases), and Note 7 (Commitments and Contingencies)[185](index=185&type=chunk) - The company did not have any off-balance sheet arrangements as of June 30, 2025[186](index=186&type=chunk) [Financial Instruments](index=53&type=section&id=Financial%20Instruments) Investment policy prioritizes principal preservation and liquidity, with no credit losses recorded on Level 1 and Level 2 financial instruments - Cash and cash equivalents are invested in money market funds (Level 1)[187](index=187&type=chunk) - Available-for-sale securities (corporate debt, U.S. government agency securities) are classified as Level 2[187](index=187&type=chunk) - No credit losses were recorded during the three and six months ended June 30, 2025 and 2024[187](index=187&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to market risk disclosures occurred during the six months ended June 30, 2025 - No material changes to market risk disclosures occurred during the six months ended June 30, 2025[188](index=188&type=chunk) [Item 4. Controls and Procedures](index=53&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=53&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) CEO and CFO concluded disclosure controls and procedures were effective as of June 30, 2025 - CEO and CFO concluded that disclosure controls and procedures are effective as of June 30, 2025[189](index=189&type=chunk) [Changes

Executive Summary & Business Outlook Cerus Corporation reported strong Q2 2025 commercial and financial results, driven by INTERCEPT product growth and pipeline advancements, leading to an upward revision of full-year 2025 product revenue guidance [CEO Commentary](index=1&type=section&id=CEO%20Commentary) Cerus Corporation's CEO highlighted strong Q2 2025 commercial results, driven by the INTERCEPT product portfolio and global adoption, with advancements in the product development pipeline and an upward revision of full-year 2025 product revenue guidance - Commercial results in Q2 2025 demonstrate progress in multiple geographies and across the INTERCEPT product portfolio, with a singular focus on advancing blood safety and availability[4](index=4&type=chunk) - The early launch and adoption of the next-generation, LED-based INT200 illumination device continue to surpass expectations regarding performance and customer experience[4](index=4&type=chunk) - Advancements in the product development pipeline are encouraging, including the early resubmission for RBC CE Mark and the recent DoD award for the CRYO-First study[4](index=4&type=chunk) - Strong commercial and financial execution in Q2 resulted in record product sales, a year-over-year narrowing of net loss attributable to Cerus, and another quarter of positive non-GAAP adjusted EBITDA[5](index=5&type=chunk) [Key Financial Highlights (Q2 2025)](index=1&type=section&id=Key%20Financial%20Highlights%20(Q2%202025)) Cerus reported robust financial performance for Q2 2025, with total revenue reaching $60.1 million, a 19% increase year-over-year, driven by record product revenue and positive non-GAAP adjusted EBITDA | Metric | Q2 2025 (Millions $) | Q2 2024 (Millions $) | Change ($) | Change (%) | | :-------------------- | :------------------- | :------------------- | :--------- | :--------- | | Total Revenue | $60.1 | $50.5 | $9.6 | 19% | | Product Revenue | $52.4 | $45.1 | $7.4 | 16% | | Government Contract Revenue | $7.7 | $5.4 | $2.2 | 41% | | IFC Revenue | $5.6 | $2.0 | $3.6 | 180% | | Net Loss Attributable to Cerus | $(5.7) | $(5.8) | $0.1 | -1.7% | | Non-GAAP Adjusted EBITDA | $0.9 | $0.8 | $0.1 | 12.5% | - Customer demand for Pathogen Reduced, Cryoprecipitated Fibrinogen Complex (IFC) continues to increase, with Q2 IFC revenue reaching **$5.6 million**, a significant increase from **$2.0 million** in the prior year period[5](index=5&type=chunk)[6](index=6&type=chunk) - Cash, cash equivalents, and short-term investments stood at **$78.0 million** at June 30, 2025[10](index=10&type=chunk)[16](index=16&type=chunk) [Full-Year 2025 Guidance Update](index=1&type=section&id=Full-Year%202025%20Guidance%20Update) Cerus Corporation has raised its full-year 2025 product revenue guidance range to $200 million - $203 million, reflecting strong first-half performance and anticipated second-half growth | Metric | Previous Guidance (Millions $) | Updated Guidance (Millions $) | Change (Millions $) | | :-------------------- | :----------------------------- | :---------------------------- | :------------------ | | Full-Year 2025 Product Revenue | $194 - $200 | $200 - $203 | Up $3 - $6 | | Full-Year 2025 IFC Revenue | $12 - $15 | $16 - $18 | Up $3 - $4 | - The company remains committed to its goal of achieving positive, full-year 2025 non-GAAP adjusted EBITDA[5](index=5&type=chunk)[15](index=15&type=chunk) Second Quarter 2025 Financial Results Cerus Corporation's Q2 2025 financial results demonstrate strong revenue growth across product and government contracts, alongside strategic investments in operating expenses, leading to a narrowed net loss and positive adjusted EBITDA [Total Revenue Analysis](index=1&type=section&id=Total%20Revenue%20Analysis) Cerus' total revenue for Q2 2025 increased by 19% year-over-year to $60.1 million, driven by strong product revenue growth and a significant increase in government contract revenue | Revenue Type | Q2 2025 (Millions $) | Q2 2024 (Millions $) | Change ($) | Change (%) | | :-------------------- | :------------------- | :------------------- | :--------- | :--------- | | Product Revenue | $52.4 | $45.1 | $7.4 | 16% | | Government Contract Revenue | $7.7 | $5.4 | $2.2 | 41% | | Total Revenue | $60.1 | $50.5 | $9.6 | 19% | [Product Revenue](index=1&type=section&id=Product%20Revenue) Product revenue for Q2 2025 reached a record $52.4 million, a 16% increase from the prior year, primarily fueled by strong global platelet sales and a substantial increase in U.S. sales of INTERCEPT Fibrinogen Complex (IFC) | Metric | Q2 2025 (Millions $) | Q2 2024 (Millions $) | Change ($) | Change (%) | | :-------------------- | :------------------- | :------------------- | :--------- | :--------- | | Product Revenue | $52.4 | $45.1 | $7.4 | 16% | | U.S. IFC Sales | $5.6 | $2.0 | $3.6 | 180% | - The year-over-year increase in product revenue was led by growth in IFC and global platelet sales[6](index=6&type=chunk) [Government Contract Revenue](index=1&type=section&id=Government%20Contract%20Revenue) Government contract revenue increased by 41% to $7.7 million in Q2 2025, primarily supporting R&D activities for the INTERCEPT RBC program, next-generation pathogen reduction technology, and lyophilized IFC development | Metric | Q2 2025 (Millions $) | Q2 2024 (Millions $) | Change ($) | Change (%) | | :-------------------- | :------------------- | :------------------- | :--------- | :--------- | | Government Contract Revenue | $7.7 | $5.4 | $2.2 | 41% | - Revenue was comprised of funding for R&D activities related to the INTERCEPT RBC program, next-generation pathogen reduction technology for whole-blood, and development of lyophilized IFC[7](index=7&type=chunk) - The increase was primarily driven by increasing enrollment in the Phase 3 RedeS trial and activities for the advancement of the INTERCEPT RBC system under BARDA contracts[7](index=7&type=chunk) [Revenue by Region](index=8&type=section&id=Revenue%20by%20Region) North America and EMEA regions showed significant product revenue growth in Q2 2025, with North America increasing by 17% and EMEA by 21%, while the 'Other' category experienced a decline | Region | Q2 2025 (Thousands $) | Q2 2024 (Thousands $) | Change ($) | Change (%) | | :-------------------------- | :-------------------- | :-------------------- | :--------- | :--------- | | North America | $35,286 | $30,097 | $5,189 | 17% | | Europe, Middle East and Africa | $16,612 | $13,725 | $2,887 | 21% | | Other | $547 | $1,257 | $(710) | -56% | | Total product revenue | $52,445 | $45,079 | $7,366 | 16% | [Product Gross Profit and Margin](index=2&type=section&id=Product%20Gross%20Profit%20and%20Margin) Product gross profit for Q2 2025 increased by 17% to $29.0 million, aligning with revenue growth, while the product gross margin remained relatively stable at 55.2% | Metric | Q2 2025 (Millions $) | Q2 2024 (Millions $) | Change ($) | Change (%) | | :-------------------- | :------------------- | :------------------- | :--------- | :--------- | | Product Gross Profit | $29.0 | $24.7 | $4.3 | 17% | | Product Gross Margin | 55.2% | 54.7% | 0.5 pp | - | [Operating Expenses](index=2&type=section&id=Operating%20Expenses) Total operating expenses for Q2 2025 increased by 18% to $40.1 million, reflecting strategic investments in both R&D and SG&A to drive future revenue growth | Metric | Q2 2025 (Millions $) | Q2 2024 (Millions $) | Change ($) | Change (%) | | :-------------------- | :------------------- | :------------------- | :--------- | :--------- | | Total Operating Expenses | $40.1 | $33.9 | $6.2 | 18% | - The increase in operating expenses reflects investments in the business to drive future revenue growth[9](index=9&type=chunk) [Research and Development (R&D) Expenses](index=2&type=section&id=Research%20and%20Development%20(R%26D)%20Expenses) R&D expenses rose by 26% to $18.9 million in Q2 2025, driven by development costs for the new LED-based INT200 device, higher government contract costs, and elevated employee compensation | Metric | Q2 2025 (Millions $) | Q2 2024 (Millions $) | Change ($) | Change (%) | | :-------------------- | :------------------- | :------------------- | :--------- | :--------- | | R&D Expenses | $18.9 | $15.0 | $3.9 | 26% | - Primary drivers for the increase were development costs on INT200, higher government contract costs, and higher employee compensation expenses[10](index=10&type=chunk)[11](index=11&type=chunk) - The European regulatory review of the CE Mark application

Financial Performance & Guidance - Cerus is raising its full-year 2024 product revenue guidance to $177 - $179 million, anticipating a 12-14% increase compared to full-year 2023 product revenue[13] - The bottom end of the 2024 IFC guidance range has been raised to $9 - $10 million, from the prior $8 - $10 million[13] - In Q3 2024, Non-GAAP Adjusted EBITDA reached $4.4 million[32] Product & Market - The global addressable market for INTERCEPT products is estimated at $1.3 billion, with potential growth to over $1.5 billion in 5-7 years[22] - The U S addressable market is $150 million, with potential growth to over $200 million in 5-7 years[22] - Cerus' preliminary 2023 product revenue was $156 million[22] Strategic Initiatives - Cerus has a new BARDA contract for INTERCEPT RBCs[11] - The company submitted a CE Mark for its LED Illuminator[11] - Cerus is focused on adjusted EBITDA and operating cash flow goals[25]

Financial Performance & Outlook - Cerus achieved positive non-GAAP adjusted EBITDA for Q4 and full year 2024 [9] - The company anticipates product revenue growth of 8% to 11% year-over-year in 2025 [9] - Cerus is committed to sustaining positive adjusted EBITDA for fiscal year 2025 [9] - GAAP net loss attributable to Cerus improved by over 40% in 2024 compared to 2023 [9] - In 2024, Cerus achieved 15% topline growth due to strong team performance and blood center partnerships [10] Market & Product Expansion - Cerus is focused on the continued global expansion of its platelet franchise [9] - The company expects increasing uptake of INTERCEPT Fibrinogen Complex (IFC) in the US [9] - The global addressable market for INTERCEPT products is currently $1.3 billion and is expected to grow to over $1.5 billion in the next 5-7 years [16] - The U S addressable market is $150 million and is expected to grow to over $200 million in the next 5-7 years [16] Technology & Impact - Cumulative kit sales for over 16 million INTERCEPT treated doses of platelets & plasma [5]

Financial Performance & Guidance - Cerus' annual product revenue has shown consistent growth from 2017 to 2022, with a compound annual growth rate (CAGR) of 30%[10] - In 2022, Cerus achieved product revenues of $162 million[33] - The company projects 2023 product revenue to be in the range of $165 million to $170 million[51] - Cerus anticipates reaching cash flow breakeven during 2023 and expects improvement across margins, cash flow, and operating expense leverage[3, 51] Market Opportunity & Growth Strategy - The global addressable market for INTERCEPT products is estimated at $1.3 billion, with potential to grow to over $1.5 billion in the next 5-7 years[33] - The U S market represents a $150 million opportunity, expected to exceed $200 million in 5-7 years[33] - Cerus is focused on geographic expansion, including new markets like China, to extend its global reach[3, 53] Technology & Product - The INTERCEPT Blood System targets DNA and RNA to prevent pathogen proliferation in blood products[19, 20] - Over 10 million cumulative kits of INTERCEPT-treated blood products have been sold[40] - Cerus has an FDA-approved product for pathogen-reduced platelets in the U S [20, 58]

Financial Data and Key Metrics Changes - The company achieved a positive non-GAAP adjusted EBITDA for 2024 and is committed to maintaining this for 2025, indicating an improving financial profile [7][42] - Current revenue guidance for 2025 is between $194 million to $200 million, representing a sub-10% penetration of the total addressable market (TAM) of $2.5 billion for existing licensed products [8][11] Business Line Data and Key Metrics Changes - The INTERCEPT Fibrinogen Complex product is projected to generate $12 million to $15 million in revenue for 2025, showing significant growth potential [11][31] - The INTERCEPT technology has been developed to treat all four transfused blood components: platelets, plasma, red cells, and fibrinogen complex, with a strong market presence in the platelet transfusion sector [4][5] Market Data and Key Metrics Changes - The total addressable market for the platelet opportunity is expected to reach at least $1.5 billion by 2030, with organic growth in the platelet market typically ranging from 3% to 5% annually [9][10] - The red cell market opportunity is the largest, estimated at $5 billion globally, highlighting the importance of getting the INTERCEPT Red Cell program approved [10] Company Strategy and Development Direction - The company aims to extend its leadership position in the INTERCEPT blood system for platelets and plasma, targeting additional market share in the U.S. and expanding into markets like China, Brazil, and Germany [42][43] - The focus is on developing real-world outcomes data for the INTERCEPT Fibrinogen Complex and targeting international opportunities [44] Management's Comments on Operating Environment and Future Outlook - Management emphasized the strong and improving financial profile, with sustained revenue growth expected through the end of the decade due to existing and new products [7][42] - The company is well-positioned to leverage its established customer base and recurring revenue model to drive growth [5][6] Other Important Information - The company has a strong cash position, which supports its growth initiatives and operational stability [7] - The INTERCEPT technology addresses significant unmet needs in transfusion medicine, particularly in pathogen reduction and safety [15][18] Q&A Session Summary Question: What is the outlook for the INTERCEPT Red Cell program? - The company is nearing completion of enrollment for the ReCePI study in the U.S., which is required for the PMA submission with the FDA [34] Question: How is the INTERCEPT Fibrinogen Complex performing in the market? - The product is gaining traction in major academic hospitals, with a projected revenue of $12 million to $15 million for 2025 and a significant market opportunity in the U.S. [31][32]

Group 1 - Cerus reported a quarterly loss of $0.04 per share, better than the Zacks Consensus Estimate of a loss of $0.05, representing an earnings surprise of 20% [1] - The company posted revenues of $43.24 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 2.95%, and up from $38.37 million a year ago [2] - Cerus has surpassed consensus EPS estimates three times over the last four quarters [2] Group 2 - The stock has underperformed, losing about 14.3% since the beginning of the year, compared to the S&P 500's decline of 5.3% [3] - The current consensus EPS estimate for the coming quarter is -$0.02 on revenues of $49.5 million, and -$0.10 on revenues of $198 million for the current fiscal year [7] - The Zacks Industry Rank for Medical - Products is in the bottom 28% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Financial Data and Key Metrics Changes - For Q1 2025, the company reported product revenue of $43.2 million, a 13% increase year-over-year, aligning with the guidance of 10% to 15% growth [21][22] - North American product revenues increased by 22% compared to the same period last year, driven by higher platelet sales and increasing demand for IFC [22][23] - First quarter product gross profit was $25.4 million, up from $21.3 million for the same period last year, representing a 20% increase [24] - The net loss attributable to the company was $7.7 million, or $0.04 per share, compared to a net loss of $9.7 million, or $0.05 per share, for the prior year period, indicating a 20% improvement [28] Business Line Data and Key Metrics Changes - The growth in product revenue was primarily led by robust North American platelet kit sales, with increasing demand in both the U.S. and Canada [18][22] - U.S. IFC sales totaled $3 million in Q1 2025, compared to $1.9 million in Q1 2024, reflecting strong customer demand [23] - EMEA product revenue declined by 4% year-over-year, with a 1% decline on a non-GAAP basis when excluding foreign exchange impacts [22] Market Data and Key Metrics Changes - The INTERCEPT system is now used in over 40 countries, with a significant presence in North America and Europe [8] - The company anticipates continued growth in international markets, particularly in regions with emerging demand for pathogen-reduced blood products [18][72] Company Strategy and Development Direction - The company aims to expand its platelet market share in the U.S. and improve IFC supply to meet growing customer demand [9][20] - The phased global launch of the INT200 device is expected to enhance the usability and efficiency of the system, supporting future geographic expansion [8][9] - The company remains focused on securing global regulatory approvals for its INTERCEPT product portfolio to improve blood safety and availability [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating geopolitical and macroeconomic uncertainties, emphasizing the compelling value proposition of INTERCEPT [16][17] - The company is optimistic about achieving positive non-GAAP adjusted EBITDA for the full year 2025, despite potential impacts from tariffs [29][30] - Management highlighted the importance of customer feedback and real-world experience in driving growth and validating the technology [72][75] Other Important Information - The company ended Q1 2025 with $80.9 million in cash and cash equivalents, a slight increase from $80.5 million at the end of 2024 [29] - Cash used from operations was minimal at $800,000, primarily tied to investments in working capital [30] Q&A Session Summary Question: Can you provide details on the 22% growth in North American product revenue in Q1? - Management noted that growth was driven by underlying demand in the U.S. franchise, with significant contributions from both platelet and IFC sales [35][38] Question: What are the next steps regarding the CE Mark application for the INTERCEPT red blood cell system? - Management indicated that TUV is conducting a clinical review, and they are optimistic about the application due to strong prior communications and a solid submission [43][45] Question: How is the EMEA business performing, particularly in France? - Management confirmed that the French platelet market remains stable, contributing positively to overall growth, with plans to initiate activity on the plasma side [48][50] Question: What are the plans to increase production capacity for IFC? - Management explained that several blood center production partners have received biologic license application approvals, allowing them to ramp up manufacturing to meet growing demand [51][53] Question: Can you discuss the assumptions in your guidance for the year? - Management clarified that the guidance includes anticipated revenue from the INT200 device and assumes a ramp-up in IFC production throughout the year [56][60]

Product Development and Regulatory Approvals - The INTERCEPT Blood System for red blood cells is currently in development and has not been commercialized anywhere in the world[122]. - The company received FDA approval for the INTERCEPT Blood System for Cryoprecipitation in November 2020, and it is being sold directly to hospitals and through blood centers[126]. - The ReCePI study, which evaluated the efficacy and safety of INTERCEPT-treated red blood cells, met its primary efficacy endpoint, demonstrating non-inferiority compared to conventional red blood cells[124]. - The company has two agreements with BARDA for funding to support the development of the red blood cell system, with the initial agreement expiring in September 2026 and a new agreement expiring in September 2030[125]. - The company plans to initiate a modular PMA application to the FDA upon anticipated completion of the RedeS clinical trial, which is expected in the second half of 2026[124]. - The company is facing challenges with the regulatory approval process for the red blood cell system, including a recent closure of its MDR application due to insufficient data[124]. - The company is required to obtain new PMAs for the INTERCEPT Blood System for Platelets and Plasma with the new LED-based illuminator[131]. Financial Performance - Product revenue for the three months ended March 31, 2025, was $43,239,000, representing a 13% increase from $38,365,000 in the same period of 2024[148]. - Government contract revenue increased to $5,614,000 for the three months ended March 31, 2025, up 12% from $5,030,000 in the prior year[148]. - Total revenue for the three months ended March 31, 2025, reached $48,853,000, a 13% increase compared to $43,395,000 in the same period of 2024[148]. - The increase in product revenue was primarily driven by year-over-year sales volume growth in disposable platelet kit sales to U.S. customers[149]. - The company expects continued growth in product revenue for INTERCEPT disposable kits due to increased market acceptance and adoption of the INTERCEPT Blood System[149]. - The company has a commitment from BARDA to reimburse up to $185.5 million for expenses related to the clinical development of the red blood cell system as of March 31, 2025[140]. - The 2024 BARDA Agreement includes committed funding of up to $32.1 million, with a total funding opportunity of $188.4 million if all options are exercised[142]. Costs and Expenses - Cost of product revenue increased by 4% to $17,815,000 for the three months ended March 31, 2025, compared to $17,093,000 for the same period in 2024[152]. - Gross margin on product sales improved to 59% in Q1 2025 from 55% in Q1 2024, driven by a favorable product mix and capitalization of inventoriable charges[153]. - Research and development expenses rose by 15% to $16,605,000 in Q1 2025, up from $14,482,000 in Q1 2024, mainly due to costs related to a new LED-based illuminator[156]. - Selling, general and administrative expenses increased by 2% to $20,286,000 in Q1 2025, compared to $19,799,000 in Q1 2024, primarily due to higher compensation costs[159]. Cash Flow and Working Capital - Net cash used in operating activities was $(844,000) for Q1 2025, a decrease from $1,959,000 provided in Q1 2024, attributed to increased inventory purchases[169]. - Net cash used in investing activities was $(1,189,000) in Q1 2025, compared to $1,446,000 provided in Q1 2024, primarily due to investment purchases[170]. - Working capital increased to $91,940,000 as of March 31, 2025, from $88,890,000 as of December 31, 2024, mainly due to higher inventory levels[172]. Risks and Financial Position - The company may need to curtail planned development or commercialization activities if unable to raise additional capital due to volatile global financial markets[129]. - The principal amounts under the Term Loan Credit Agreement will begin amortizing on April 1, 2026, which could negatively impact available working capital[128]. - The company expects to meet its capital requirements for at least the next 12 months through available cash, cash equivalents, and short-term investments, alongside revenue from product sales and government contracts[173]. - The company has the potential to borrow additional capital under existing credit agreements, which may include restrictive covenants that could impact operational flexibility[174]. - Funding from BARDA is subject to risks, including potential termination of agreements and the need to achieve specific milestones, which could significantly impact revenues and cash flows[179]. - The company does not currently hedge against foreign exchange fluctuations, which could materially affect future results[180]. - Economic uncertainties, including inflation and trade tensions, may limit the company's access to capital and negatively impact liquidity[181]. - Additional funding may be required to complete development activities for the red blood cell system, especially if costs exceed expectations or delays occur[182]. - The company has no off-balance sheet arrangements as of March 31, 2025, indicating a straightforward financial position[184]. Investment and Market Risk - The investment policy focuses on preserving principal and liquidity while maximizing returns, with no recorded credit losses during the three months ended March 31, 2025[185]. - There were no material changes to market risk disclosures during the three months ended March 31, 2025, indicating stability in risk management practices[186].

Financial Data and Key Metrics Changes - For Q1 2025, the company reported product revenue of $43.2 million, a 13% increase year-over-year, aligning with the guidance of 10% to 15% growth [20][21] - North American product revenues increased by 22% compared to the same period last year, driven by higher platelet sales and increasing demand for IFC [21][22] - Product gross profit for Q1 was $25.4 million, up from $21.3 million in the prior year, representing a 20% increase [24] - The net loss attributable to the company was $7.7 million, or $0.04 per share, compared to a net loss of $9.7 million, or $0.05 per share, for the prior year, indicating a 20% improvement [28] Business Line Data and Key Metrics Changes - The growth in product revenue was primarily led by robust North American platelet kit sales, with increasing demand in both the U.S. and Canada [17][21] - U.S. IFC sales totaled $3 million in Q1 2025, compared to $1.9 million in Q1 2024, reflecting strong customer demand [22] - EMEA product revenue declined by 4% year-over-year, with a 1% decline on a non-GAAP basis when excluding foreign exchange impacts [21] Market Data and Key Metrics Changes - The INTERCEPT system is now used in over 40 countries, with a standard of care established in approximately one-third of those countries [7] - The company anticipates continued growth in international markets, particularly in regions with increasing adoption of INTERCEPT technology [17][72] Company Strategy and Development Direction - The company aims to expand its platelet market share in the U.S. and improve IFC supply to meet growing customer demand [9][19] - The phased global launch of the INT200 device is expected to enhance the usability and efficiency of the system, supporting future geographic expansion [8][9] - The company remains focused on securing global regulatory approvals for its INTERCEPT product portfolio to improve blood safety and availability [32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating geopolitical and macroeconomic uncertainties, emphasizing the compelling value proposition of INTERCEPT technology [15][16] - The company expects to achieve positive adjusted EBITDA for the full year, assuming existing tariffs remain in place [29] Other Important Information - The company ended Q1 2025 with $80.9 million in cash and cash equivalents, a slight increase from $80.5 million at the end of 2024 [29] - Cash used from operations was minimal at $800,000, primarily tied to working capital investments in anticipation of expected commercial growth [29] Q&A Session Summary Question: Can you elaborate on the 22% growth in North American product revenue? - Management indicated that growth was driven by underlying demand in the U.S. franchise, with significant contributions from both platelet and IFC sides [35][39] Question: What are the next steps regarding the CE Mark application for the INTERCEPT red blood cell system? - Management confirmed that TUV is conducting a clinical review, and they are optimistic about the application based on previous submissions [43][45] Question: How is the EMEA business performing, particularly in France? - Management reported stability in the French platelet market, with positive experiences from INTERCEPT and plans to initiate plasma activities [48][49] Question: What are the plans to increase production capacity for IFC? - Management noted that several production partners have received biologic license application approvals, enabling them to ramp up manufacturing to meet growing demand [51][53] Question: Can you discuss the assumptions in your guidance for the year? - Management indicated that the guidance includes anticipated revenue from the INT200 device and assumes a ramp-up in IFC production throughout the year [56][59]